Plastribution’s Polymer Price Know-How: June 2024

Plastribution’s June Polymer Price Know-How highlights the market dynamics as buyers push for price concessions amid falling raw material and energy costs. Despite the downward pressure on feedstocks and crude oil prices, rising container shipping costs from Asia and robust US domestic demand for polyethylene are influencing market behaviour. The European and UK markets are closely monitoring the potential for price increases, tempered by seasonal demand fluctuations and the uncertain economic outlook.

There is no doubt that falling polymer production input costs in terms of raw materials and energy are causing UK and European buyers to push for further price concessions. As shown in the table below most feedstocks/monomers and crude oil prices remain under downward pressure. However, this is far from the complete picture as container shipping costs from Asia are again spiking, as Western retailers rush to import goods for anticipated seasonal demand from Black Friday promotions and the Christmas gifting season.

Furthermore, there is a desire to ‘rush’ imports in an attempt to avoid the feared imposition of tariffs on the import of Chinese goods to the US, which may further be influenced by the outcome of the forthcoming US elections.

Remaining with the US, the import of US-origin polyethylene is gaining significance in the European and UK markets, and it appears that US producers are taking a robust approach to price and referencing strong US domestic demand along with high local pricing to not only justify maintaining price but in many cases pushing for increases, particularly where availability is viewed as already snug.

For many sellers, across a wide range of polymers, there is more of a view of ‘when’ rather than ‘if’ prices start to increase, although effects such as lower seasonal demand due to the summer holiday period, will need to be tempered with reticence to import US cargoes when the immediate economics do not look attractive. Ultimately, the market will determine what happens, but with supply chains looking quite empty, if a turnaround comes, the impacts could be quite significant.

Monomer Price Movement

Exchange Rates

€- 1.17
$- 1.26
€/$- 1.08

Polyolefins

Polyolefin prices are starting to stabilise in June with many considering this the bottom of the current pricing cycle. Both monomers, Ethylene C2 and Propylene C3 dropped €30 / MT and this change is mostly reflected in polymer pricing. Some producers initially looked for rollover, but most have passed on the reductions. There are some producers of PP in Force Majeure this month with very restricted availability and consequently didn’t see the need to offer reductions this month.

PP pricing is generally performing better than PE as the supply/demand balance is slightly better with limited European production and lower levels of imports. However, whilst PE has seen strong imports at the start of the year when pricing was better, these are drying up as producers in the USA and Middle East see better returns elsewhere.

Freight rates are starting to become an issue with increases of $4,000 per container over the cost at the start of the year. This adds around £130-160 / MT on imports from the Far East. We’re also seeing disruption at ports in the Middle East affecting European supply.

Overall, prices should stay quite flat for the summer. How strong a recovery, if at all, we see from September will depend on many factors around the world and how economies start to recover.

Styrenics

Contract Styrene Falls slightly, Polymer prices show a small reduction.

Styrene Monomer has fallen again, settling at €1680/T, a decrease of €30/T from April.

For June, EU GPPS and HIPS has fallen, with EU ABS remaining flat. Deep sea materials have rolled, but increasing shipping costs could impact future trends.

GPPS/HIPS/ABS supply chains are still running very low. Polymer producers have been running output at a minimum due to poor demand, and converters and distributors running inventory at very low levels due to financial pressures. Therefore, any adjustments in polymer prices are likely to be passed on immediately.

Engineering Polymers

Demand overall remains relatively weak and the supply chain plentiful for most engineering materials. With the June benzene contract settling €35/mt higher it is likely that most prices will rollover in June, with only PMMA and possibly POM & PC facing an upward trend.

The Benzene contract for June settled €35/mt higher at €1152/mt.

Sustainable Polymers

Recycled materials have seen around rollover into June with higher performance grades seeing increasing demand but lower quality grades seeing an oversupply situation.

Recycled LDPE / LLDPE

Recycled LDPE / LLDPE has seen a mixed picture in June with natural, tight specification grades seeing increases of around €20 / MT based on continued strong bale input costs and improving demand. However, lower quality grades continue to see good availability and are typically falling in line with Prime prices.

Recycled HDPE

Recycled HDPE is performing relatively well in June with natural blow moulding grades suitable for consumer packaging continuing to command a significant premium over Prime as brands look to push their “Green” marketing. Black and jazz grades are still under pressure with good availability and weak demand from key sectors such as construction.

Recycled PP

Recycled PP is around rollover into June, natural grades still command a strong premium over Prime with demand beyond current output, natural PP can be €400 / MT over the price of Prime. Black grades are relatively balanced, automotive grades are performing OK despite low demand in that sector as demand for more recycled content in cars increases.

Price Know-How: June 2024 Full Report

Visit the Price Know-How website to read the June 2024 update, which details each market segment and material group produced by Plastribution’s expert product managers.

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Price Know-How, a decade-long trusted resource in the industry, provides essential updates on polymer pricing and market dynamics. This report is crafted by Plastribution, a leading polymer distributor, in collaboration with Plastics Information Europe.

Price Know-How is tailored specifically for the UK polymer industry, unlike many other price reports. They do all the currency conversions, so you don’t need to!

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